Implementing clear, targeted and education communication strategies can help your organization bridge the gender wealth gap.

Authors: Brenda Davis Mary B. Kusske, CFP®

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Gender disparity among the workforce in financial planning hasn't always been evident. However, once recognized, the need to prioritize equitable financial wellbeing opportunities is often glaring.

Socking away money in a savings account for unexpected financial needs is a helpful habit, when it's one of several key steps toward preparing financially for the future. But short-term goals, longer-term goals, retirement and preparation for disbursement of wealth upon death require a more structured approach, using resources such as a 401(k), IRA, long-term care and life insurance. And therein lies a challenge for employers — women aren't as likely to use them as men are.

Marketing within the personal financial management industry has traditionally targeted men. Although that's been changing in recent years, many products and services still need to resonate better with women in order to connect with them. The consequences of oversight show up in statistics. Men have met with a financial advisor at nearly twice the rate of women (59% vs. 31%), and comparisons for life insurance ownership echo that edge (53% vs. 46%).1, 2

The need to evaluate, plan and tweak organizational priorities, finances and benefits is no small task. Yet integrating reviews of financial wellbeing programs and services into this process provide an opportunity to identify and address areas for improvement. For example, increasing utilization among certain segments can positively impact the organization and employees without requiring an investment in new benefits.

Growing recognition and gradual course correction

Gender disparity in financial planning is years in the making, but the impetus to reverse it is strong. There's a coalition of agreement among employers overall, firms that offer financial products and services and, of course, women.

In some cases, personal experiences are prompting women to become more financially prepared. Exposure to family financial struggles, layoffs, inflation and other taxing effects of economic volatility reveal the risks of instability. A 2021 study found that 67% of women invested outside of their retirement accounts, up from 44% in 2018, and 90% planned to take steps within the next year to help their money work harder to grow.3

Other motivators for better money management include financial planners and wealth movement firms that understand the dilemma faced by women who are underserved. And some insurance carriers have responded by hiring more women and developing products that speak more directly to the priorities of key segments within this demographic.

67% of women invest outside retirement accounts and 90% plan to take steps within next 12 months to grow wealth.

Course corrections for strengthening employer and employee financial wellbeing

After navigating a prolonged period of fierce competition for talent, the need to build a skilled workforce shows no signs of abating. Many employers continue to focus on attracting and retaining entry-level and mid-level employees, as more experienced employees enter their final career stages. Offering benefits that help manage and grow wealth promotes retention throughout the employment cycle.

Support for achieving financial stability also helps reduce a major source of employee stress in the US — concerns about money — that affects 59% of women and 55% of men more than once a week.1 Alleviating this worry and tension can also improve employees' physical health and on-the-job productivity.

Leaning into practical tools and targeted communications

Employers can apply multiple tactics to assist women (and others) with enhancing their financial wellbeing. Two foundational opportunities are education about the baseline importance of literacy and storytelling as a method of encouraging employees to connect with opportunities. Indispensably, they coincide with regular, targeted communications that provide clear guidance for establishing a secure financial future and promote active participation.

Improving financial literacy through education

Women tend to have less knowledge about personal finance than men do. In a 2022 study, US women correctly answered 45% of financial-related questions compared to 55% of men.4 Becoming conversant in this subject and achieving a sense of financial wellbeing are closely linked. Simply by increasing their familiarity with the basic terms and concepts of finance and insurance, employees can boost their comfort level and aptitude.

Regardless of gender, employees need a clear assessment of their financial situation to fully benefit from their learning and insights. It's the basis for setting realistic goals and determining how to meet them through investments and insurance, in addition to savings. Because employers frequently offer basic types of insurance, like group life, employees may think they have more financial protection than they actually do. Educating women about their financial needs and how those needs change throughout life is essential to maximizing their financial health.

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No matter where a woman falls on the life-stage spectrum, or what her financial profile is, the right benefits can help to build, sustain and grow wealth.

Reducing hesitancy with storytelling

Just the idea of investing can be uncomfortable for the uninitiated, often because the products and terminology involved in this process are neither widely used nor well understood. But telling stories about building financial confidence provides a relatable context that helps employees overcome their hesitations. Inspirational anecdotes are especially effective at reducing confusion and dispelling concerns. Overall, the aim of stories is to clarify how wealth-building works, highlighting the importance of investments and life insurance to financial stability.

Giving clear and actionable advice

Women interested in building their wealth don't always know where to begin, and many find it hard to get started when other tasks vie for their time. Financial wellbeing communications need to acknowledge the difficulty of competing priorities with succinct content that lays out clear action steps. Also important is considering that incremental steps are easier to complete. For instance, an initial email can prompt employees to visit a website or call a number, which are simpler asks that are likely to increase responses. The primary takeaway for employees from actionable communications, individually and overall, should be an understanding that it's okay to ask for help.

Segmenting communications by audience

Messages that target distinct employee groups within an organization, customized by defining characteristics such as employees' salary range, career level or age, are often more effective. Since employee communication preferences vary within demographics as well as between them, using multiple channels helps ensure messages are received. Careful vetting of an increasing number of delivery options matters when determining how to reach each audience segment.

Communicating with regularity

Financial wellbeing is an ongoing process that's best supported by ongoing communication efforts. Throughout the year, topics should range from specific opportunities such as enrolling in a stock- sharing plan, to periodic check-ins that assess progress with financial goals. Regular touch points help to keep employees engaged and committed to achieving their goals.

Securing financial confidence isn't only achievable for women, it's worth a prominent place on their to-do lists. No matter where a woman falls on the life-stage spectrum, or what her financial profile is, the right benefits can help to build, sustain and grow wealth.

Author Information

Sources

1"The State of Women's Financial Wealth in 2022," Ellevest, 22 Sept 2022. PDF file.

2"2022 Insurance Barometer Study Reveals the Secret to Financial Security Is Owning Life Insurance," Life Happens, 25 Apr 2022.

3"2021 Women and Investing Study," Fidelity Investments, 7 Oct 2021. PDF file.

4"Three New Reports Highlight Economic Gains and Challenges Among Women Since Title IX's Enactment," TIAA Institute, 23 Jun 2022.

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